Question

A government passes a new law allowing only 1,000 tons of pollution per day to be generated and simultaneously sells 1,000 transferable rights to emit one ton each of pollution per day. Which of the following is true? The pollution will be created by those most willing and able to pay for the right to pollute. The firms that are able to reduce emissions of the pollutant at the lowest costs will pay the highest prices for the emission permits. The funds collected by the government will be enough to compensate any individuals harmed by the pollution. There will be no incentive for polluters to try to sneak emissions past government monitoring devices.

          A government passes a new law allowing only 1,000 tons of pollution per day to be generated and simultaneously sells 1,000 transferable rights to emit one ton each of pollution per day. Which of the following is true?
The pollution will be created by those most willing and able to pay for the right to pollute.
The firms that are able to reduce emissions of the pollutant at the lowest costs will pay the highest prices for the emission permits.
The funds collected by the government will be enough to compensate any individuals harmed by the pollution.
There will be no incentive for polluters to try to sneak emissions past government monitoring devices.

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A government passes a new law allowing only 1,000 tons of pollution per day to be generated and simultaneously sells 1,000 transferable rights to emit one ton each of pollution per day. Which of the following is true?
The pollution will be created by those most willing and able to pay for the right to pollute.
The firms that are able to reduce emissions of the pollutant at the lowest costs will pay the highest prices for the emission permits.
The funds collected by the government will be enough to compensate any individuals harmed by the pollution.
There will be no incentive for polluters to try to sneak emissions past government monitoring devices.

Added by Justin S.

Principles of Economics

Gregory Mankiw 8th Edition

Instant Answer

Solved by Expert Madhur L

11/14/2023

Step 1

This statement is true because firms that can reduce emissions at a lower cost will find it more cost-effective to purchase emission permits rather than invest in expensive pollution control technologies. Show more…

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A government passes a new law allowing only 1,000 tons of pollution per day to be generated and simultaneously sells 1,000 transferable rights to emit one ton each of pollution per day. Which of the following is true? The pollution will be created by those most willing and able to pay for the right to pollute. The firms that are able to reduce emissions of the pollutant at the lowest costs will pay the highest prices for the emission permits. The funds collected by the government will be enough to compensate any individuals harmed by the pollution. There will be no incentive for polluters to try to sneak emissions past government monitoring devices. O There will be no incentive for polluters to try to sneak emissions past government monitoring devices. O The funds collected by the government will be enough to.compensate any individuals harmed by the pollution. O The firms that are able to reduce emissions of the pollutant at the lowest costs will pay the highest prices for the emission permits. O The pollution will be created by those most willing and able to pay for the right to pollute. ton each of pollution per day. Which of the following is true?

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